Singing the chorus from the theme song of Disney'€™s animated box office hit Frozen, '€œLet It Go'€, AirAsia Group'€™s CEO Tony Fernandes emphasizes that the operating permit of his company'€™s Indonesian affiliate would not be frozen as the government will not be applying that sanction.

Fernandes said during the company'€™s event to celebrate its 300 millionth passenger in South Jakarta on Monday that Indonesia AirAsia was in the process of turning around its negative equity into a positive.

'€œWe have no problem complying [with the Transportation Ministry'€™s requirement]. ['€¦] We won'€™t be frozen,'€ he said, adding that his company was a big part of Indonesia'€™s economy and had created many jobs related to tourism.

Last week, Transportation Minister Ignasius Jonan announced 11 airlines, including Indonesia AirAsia, whose businesses were at risk if they could not eliminate their negative equities by an extended deadline of Sept. 30. Negative equity occurs when the value of an asset used to secure a loan is less than the amount of the outstanding debt.

Fernandes told journalists that his company would like to keep investing in Indonesia, despite the equity problem.

'€œWe have found so many great places in ASEAN, including Indonesia, that we can develop,'€ he said, adding that the low global oil price environment had enabled Asia'€™s largest low-cost carrier to reduce ticket prices and attract more passengers.

He went on to say that Indonesian passengers made up 25 to 27 percent of the total passenger numbers from all five of AirAsia Group'€™s operations in Malaysia, Indonesia, Thailand, the Philippines and India.

Indonesia AirAsia president director Sunu Widyatmoko refused to explain what instruments would be used and actions taken by his company to bring its equity into a positive state, saying that an initial public offering (IPO) that has been planned since 2011 is not an option.

'€œWe will consider other options, including a bond issuance. The shareholders meeting is being arranged,'€ he said, adding that reaching a positive equity would take some time. '€œHowever, we are sure that we can meet the deadline.'€

Sunu admitted that, to date, the company'€™s balance sheet was still negative '€” a condition that first occurred in mid-2013 because of the weakening of the rupiah'€™s value against the US dollar.

But the weak currency serves as a blessing in disguise for Indonesia AirAsia'€™s passengers, as it encourages more international flights to be routed through Indonesia.

'€œThe chances look better if we bring passengers into Indonesia as they consider it cheaper to fly to the country,'€ he said, expressing confidence that the company could apply to the ministry for additional international routes after his company fulfills the equity requirement.

Minister Jonan said there would be no further grace period given to the ailing airlines and his office would revoke their air operator certificates (AOCs) if they fail to provide the ministry with the required documents, providing balance sheets and describing improvement actions that have been taken by the companies.

At the time, the minister revealed that some airlines had not provided legal proof of fund-raising, although they had submitted letters to the ministry proclaiming their abilities and outlining plans to raise the equity after the first deadline of July 31 expired. (prm)

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